October 1, 2014 11:36AM

Washington Should Recognize India as an Emerging Great Power

Before becoming prime minister, India’s Narendra Modi was barred from receiving a visa to visit the United States.  A rising leader in the Hindu nationalist Bharatiya Janata Party (BJP), he was tied to deadly sectarian violence. But now he leads one of Asia’s most important powers and the Obama administration is rolling out the red carpet.

India long was ruled by the dynastic India National Congress Party, which enshrined dirigiste economics as the state’s secular religion.  Eventually, however, reality seeped into New Delhi. The Congress Party liberalized the economy. The BJP broke the Congress monopoly on power. 

New Delhi appeared ready to follow the People’s Republic of China to international superstar status. But then enthusiasm for economic reform ebbed, economic growth slowed, and conflict with Pakistan flared. 

However, on May 26, Narendra Modi became prime minister.  He is visiting the United States to speak before the United Nations and meet with President Barack Obama. The trip could yield rich benefits for both countries.

Of course, there was that embarrassing visa ban, the only one ever issued for that reason by Washington.  While serving as the chief minister of the state of Gujarat in 2002, Modi was implicated in Hindu riots which killed more than 1200 people, mostly Muslims. However, Modi escaped responsibility and the matter has been quietly forgotten in Washington.

The prime minister’s visit to America offers an opportunity for a reset in bilateral relations. The George W. Bush administration improved ties by accepting New Delhi’s development of nuclear weapons, but little progress has occurred during the current administration. Indeed, trade and diplomatic controversies have put the two governments at sharp odds.

The result is a lost opportunity for both nations. India, which trails only America and China economically in purchasing power parity, performs far below its potential.

Modi naturally hopes to expand his nation’s commercial ties throughout Asia, which increasingly is the world’s economic center of gravity. But America remains the most important single state—with the largest (depending on measure), most sophisticated, and wealthiest economy. 

Geopolitically, India has yet to play the international game as well as possible, though the new prime minister embarked upon an ambitious travel schedule abroad. New Delhi’s most persistent foreign antagonist is Pakistan.  In the long term, New Delhi’s desire to develop international counterweights to China, even while cooperating economically, is most important.

The greatest prize for New Delhi would be the strengthening relations with the United States.  The prime minister recently cited the improvement in bilateral relations and explained:  “Our ties have deepened.  India and the United States of America are bound together, by history and by culture.  These ties will deepen further.” 

Washington is thinking in similar terms. When Secretary of State John Kerry visited New Delhi in July, he said he wanted the two nations to become “indispensable partners.”

No one expects a formal military alliance, which would be in neither nation’s interest.  And important issues will continue to divide the two capitals.  But friendlier political relations, increased security cooperation, and enhanced trade and investment would remind the PRC that its growing power is matched by that of its wary neighbors. 

India has further to travel than China to geopolitical greatness, but it still matters today.  New Delhi will matter much more tomorrow, especially if Prime Minister Modi commits his political capital to eliminate barriers to entrepreneurship, investment, and growth.

The 21st century will be the Asian century, with a major assist from the United States. Most analysts presume Chinese dominance, but India could prove them wrong.  As I wrote in Forbes online:  “If Barack Obama and Narendra Modi make a serious effort to overcome past differences, their governments could find themselves, like Rick and Captain Renault in the movie Casablanca, at the ‘beginning of a beautiful friendship’.”